EXECUTION COPY
FIRST AMENDMENT, WAIVER AND AGREEMENT
FIRST AMENDMENT, WAIVER AND AGREEMENT, dated as of March 24, 1997 (this
"Amendment"), to the Existing Credit Agreement (as hereinafter defined), by and
among INTERNATIONAL AIRLINE SUPPORT GROUP, INC., a Delaware corporation (the
"Borrower"), and BNY FINANCIAL CORPORATION, a New York corporation (the
"Lender").
RECITALS
The Borrower and the Lender have entered into the Existing
Credit Agreement, pursuant to which the Lender is providing to the Borrower (i)
an $11,000,000.00 revolving credit facility (the "Revolver Facility") and a
$3,000,000.00 term loan facility (as specifically defined below, the "Term Loan
A Facility"), which is secured by accounts receivable, inventory and other
collateral of the Borrower. The Borrower has requested that the Lender provide
an additional $3,750,000.00 term loan facility (as specifically defined below,
the "Term Loan B Facility") for the acquisition of three (3) Boeing 727-100
aircraft (bearing manufacturer's serial numbers 18892, 18903 and 18905,
respectively) (the "Aircraft Acquisition"). The Borrower has also requested
that the Lender increase the maximum amount available under the Revolver
Facility to $13,000,000.00. Subject to the terms and conditions hereof, the
Lender is willing (i) to provide the Term Loan B Facility to the Borrower, (ii)
to increase the maximum amount available under the Revolver Facility to
$13,000,000.00 and (iii) to amend and waive certain provisions of the Existing
Credit Agreement in order to effectuate the foregoing.
In consideration of the foregoing and of the mutual covenants
and undertakings herein contained, the parties hereto hereby agree that the
Existing Credit Agreement is amended as hereinafter provided.
ARTICLE I
Definitions
1. Definitions. (a) In addition to the definitions set
forth in the heading and the recitals to this Amendment, the following
definitions shall apply to this Amendment:
"Agreement": means the Credit Agreement, dated as of September
30, 1996, between the Borrower and the Lender, as amended, supplemented or
otherwise modified from time to time up to and including this Amendment.
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"Existing Credit Agreement": means the Credit Agreement, dated
as of September 30, 1996, between the Borrower and the Lender, as the same may
have been amended, supplemented or modified from time to time up to but not
including the effectiveness of this Amendment.
"First Amendment Documents": the First Amendment, Amendment No.
1 to Borrower Security Agreement, the Pledge Agreement, the Xxxxx Consent and
Agreement, the Term Loan B Aircraft Chattel Mortgages, the Xxxxx Leases, the
Xxxxx Aircraft Lease Supplements, Term Note B, and any other agreements,
instruments and documents executed or delivered pursuant to or in connection
with the First Amendment and the transactions contemplated thereby.
(b) Unless otherwise indicated, capitalized terms that are used
but not defined herein shall have the meanings ascribed to them in the Existing
Credit Agreement.
ARTICLE II
Representations
1. Representations. (a) The Borrower hereby represents
and warrants as follows:
(i) It (A) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (B) has the
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (C) is duly qualified and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification and (D) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith reasonably could not, in the aggregate, be expected to have a Material
Adverse Effect.
(ii) It has the power and authority, and the legal right, to
make, deliver and perform this Amendment and the other First Amendment Documents
to which it is a party and to borrow under the Agreement and has taken all
necessary action to authorize the borrowings on the terms and conditions of the
Agreement and this Amendment and to authorize the execution, delivery and
performance of the First Amendment Documents to which it is a party. No consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required in connection with
the borrowings under the Agreement or with the execution, delivery, performance,
validity or enforceability of the First Amendment Documents to which it is a
party. Each First Amendment Document to which the Borrower is a party has been
or will be duly executed and delivered on behalf of the Borrower. Each First
Amendment Document to which the Borrower is a party when executed and delivered
will constitute a legal, valid and binding obligation of the Borrower
enforceable against it in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(iii) The conditions contained in Article V hereof have been satisfied.
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(b) The Borrower represents that each of the Credit Documents is on the
date hereof in full force and effect.
ARTICLE III
Amendments to Existing Credit Agreement
1. Amendments to Section 1. (a) Section 1.1 of the
Existing Credit Agreement is hereby amended by inserting the following new
definitions therein in alphabetical order:
"Amendment No. 1 to Borrower Security Agreement":
that certain Amendment No. 1 to Borrower Security Agreement, dated as
of the First Amendment Effective Date, from the Borrower to the
Lender.
"Xxxxx": Xxxxx Worldwide Airlines, Inc., a Nevada
corporation corporation.
"Xxxxx Aircraft Lease Supplements": the collective
reference to the Lease Assignment Assumption and Releases, dated as of
March 24, 1997 by and among AAR Engine Group, Inc., the Borrower and
Xxxxx, pursuant to which the Borrower becomes the lessor under each of
the Xxxxx Leases.
"Xxxxx Consent and Agreement": that certain
Consent and Agreement, dated as of the date hereof, by and among
Xxxxx, the Borrower and the Lender, in respect of the Xxxxx Leases.
"Xxxxx Leases": the collective reference to each
Aircraft Lease Agreement in respect of a Term Loan B Aircraft, dated
as of February 17, 1994, September 22, 1993 and September 23, 1993,
respectively, and each of which is between Xxxxx (as lessee) and the
Borrower (as successor lessor), as the same may be amended,
supplemented or modified from time to time.
"First Amendment": that certain First Amendment,
Waiver and Agreement, dated as of March 24, 1997, between the Borrower
and the Lender.
"First Amendment Documents": the First Amendment,
Amendment No. 1 to Borrower Security Agreement, the Pledge Agreement,
the Xxxxx Consent and Agreement, the Term Loan B Aircraft Chattel
Mortgages, the Xxxxx Leases, the Xxxxx Aircraft Lease Supplements,
Term Note B, and any other agreements, instruments and documents
executed or delivered pursuant to or in connection with the First
Amendment and the transactions contemplated thereby.
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"First Amendment Effective Date": the date on
which all of the conditions precedent to the effectiveness of the
First Amendment set forth in Article V of the First Amendment are
first satisfied or waived.
"Pledge Agreement": that certain Borrower Pledge
Agreement, dated as of the First Amendment Effective Date, from the
Borrower to the Lender pursuant to which the Borrower pledges to the
Lender 100% of the outstanding Capital Stock of IASG-Virgin Islands,
Inc., its wholly-owned subsidiary.
"Term Loan A": as defined in Section 2.3(a)
(together with any advance made in connection with the substitution of
a Term Loan A Aircraft or a Term Loan A Aircraft Engine pursuant to
Section 2.5(a)).
"Term Loan A Aircraft": means each Aircraft owned
from time to time by the Borrower and listed as a Term Loan A Aircraft
and described on Schedule I hereto, as the same may be amended or
modified from time to time in accordance with this Agreement.
"Term Loan A Aircraft Engine": means each Aircraft
Engine owned from time to time by the Borrower and listed as a Term
Loan A Aircraft Engine and described on Schedule I hereto, as the same
may be amended or modified from time to time in accordance with this
Agreement.
"Term Loan A Borrowing Base": at any time, an
amount equal to (i) 80% (or such other percentage as the Lender shall
determine in its sole discretion) of the Forced Liquidation Value,
after deduction of any applicable Collateral Reserves, at such time,
of all Term Loan A Aircraft domiciled in jurisdictions other than
Kenya and all Term Loan A Aircraft Engines and (ii) 50% (or such other
percentage as the Lender shall determine in its sole discretion) of
the Forced Liquidation Value, after deduction of any applicable
Collateral Reserves, at such time, of all Term Loan A Aircraft
domiciled in Kenya.
"Term Loan A Facility": at any time, the
obligation of the Lender to make Term Loan A in accordance with the
provisions of this Agreement, which shall not exceed an amount equal
to $3,000,000.00 minus the aggregate amount of repayments of principal
then required to have been made in accordance with Schedule 2.3A.
"Term Loan B": as defined in Section 2.3(b)
(together with any advance made in connection with the substitution of
a Term Loan B Aircraft or a Term Loan B Aircraft Engine pursuant to
Section 2.5(b)).
"Term Loan B Aircraft": means each Aircraft owned
from time to time by the Borrower and listed as a Term Loan B Aircraft
and described on Schedule I hereto,
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as the same may be amended or modified from time to time in accordance
with this Agreement.
"Term Loan B Aircraft Engine": means each Aircraft
Engine owned from time to time by the Borrower and listed as a Term
Loan B Aircraft Engine and described on Schedule I hereto, as the same
may be amended or modified from time to time in accordance with this
Agreement.
"Term Loan B Aircraft Chattel Mortgages": the
collective reference to each Aircraft Chattel Mortgage, dated as of
the First Amendment Effective Date, from the Borrower to the Lender
with respect to a Term Loan B Aircraft.
"Term Loan B Borrowing Base": at any time, an
amount equal to 80% (or such other percentage as the Lender shall
determine in its sole discretion) of the Forced Liquidation Value,
after deduction of any applicable Collateral Reserves, at such time,
of all Term Loan B Aircraft and all Term Loan B Aircraft Engines.
"Term Loan B Facility": at any time, the
obligation of the Lender to make Term Loan B in accordance with the
provisions of this Agreement, which shall not exceed an amount equal
to $3,750,000.00 minus the aggregate amount of repayments of principal
then required to have been made in accordance with Schedule 2.3B.
"Term Loan Borrowing Bases": the collective
reference to the Term Loan A Borrowing Base and the Term Loan B
Borrowing Base.
"Term Loan Facilities": the collective reference
to the Term Loan A Facility and the Term Loan B Facility.
"Term Loans": the collective reference to Term
Loan A and Term Loan B.
"Term Note A": a promissory note of the Borrower
evidencing Term Loan A, in form and substance acceptable to the
Lender.
"Term Note B": a promissory note of the Borrower
evidencing Term Loan B, in form and substance acceptable to the
Lender.
(b) The definition of the term "Approved Aircraft" in Section
1.1 of the Existing Credit Agreement is hereby deleted in its entirety and
replaced by the following:
""Approved Aircraft": means the collective
reference to the Term Loan A Aircraft, the Term Loan A Aircraft
Engines, the Term Loan B Aircraft and the Term Loan B Aircraft
Engines."
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(c) The definition of the term "Credit Documents" in Section 1.1
of the Existing Credit Agreement is hereby deleted in its entirety and replaced
by the following:
""Credit Documents": this Agreement, the First
Amendment, the Security Documents, the Republic Intercreditor
Agreement, each Consent and Agreement, Term Note A, Term Note B, any
Revolver Note and any other documents, agreements or instruments
executed and delivered to the Lender pursuant to Section 6.11."
(d) The definition of the term "Facilities" in Section 1.1 of
the Existing Credit Agreement is hereby deleted in its entirety and replaced by
the following:
""Facilities": the collective reference to the
Revolver Facility and the Term Loan Facilities."
(e) Clause I of the definition of "Revolver Borrowing Base" in
Section 1.1 of the Existing Credit Agreement is hereby deleted in its entirety
and replaced by the following:
"I. the sum of (a) 85% (or such other percentage
as the Lender shall determine in its sole and absolute discretion) of
the total outstanding balance, after subtracting any Collateral
Reserves, of then Eligible Accounts and Eligible Lease Payment
Receivables, (b) 100% (or such other percentage as the Lender shall
determine in its sole and absolute discretion) of the aggregate amount
of all maintenance reserves held in a restricted account pursuant to
Section 3.5(f), and (c) the least of (i) 100% (or such other
percentage as the Lender shall determine in its sole and absolute
discretion) of the total cost, after subtracting any Collateral
Reserves, of then Eligible Inventory plus $500,000.00, (ii) 75% (or
such other percentage as the Lender shall determine in its sole and
absolute discretion) of the Forced Liquidation Value, after
subtracting any Collateral Reserves, of such Eligible Inventory and
(iii) $9,500,000.00;"
(f) The definition of "Revolver Facility" in Section 1.1 of the
Existing Credit Agreement is hereby amended by deleting in the third line
thereof the number "$11,000,000.00" and replacing it with the number
"$13,000,000.00".
(g) The definition of "Revolver Reserve" in Section 1.1 of the
Existing Credit Agreement is hereby deleted in its entirety and replaced by the
following:
""Revolver Reserve": as of any date, an amount
equal to the lesser of (i) the amount, if any, by which the sum
determined in accordance with clause I of the definition of Revolver
Borrowing Base on such date exceeds the aggregate outstanding Revolver
Advances on such date and (ii) the amount, if any, by which the sum of
the Term Loan A Facility (without regard to any Term Loan A borrowings
made prior to or on such date) on such date and the Term Loan B
Facility (without regard to any Term Loan B
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borrowings made prior to or on such date) on such date exceeds the sum
of the Term Loan A Borrowing Base on such date and the Term Loan B
Borrowing Base on such date."
(h) The definition of "Security Documents" in Section 1.1 of the
Existing Credit Agreement is hereby amended by adding in the second line thereof
the words "Amendment No. 1 to Borrower Security Agreement, the Pledge
Agreement," after the words "Borrower Security Agreement,".
(i) The term "Term Loan Borrowing Base" and its related
definition in Section 1.1 of the Existing Credit Agreement are hereby deleted in
their entirety.
(j) The term "Term Loan Facility" and its related definition in
Section 1.1 of the Existing Credit Agreement are hereby deleted in their
entirety.
(k) The term "Term Note" and its related definition in Section
1.1 of the Existing Credit Agreement are hereby deleted in their entirety.
2. Amendments to Section 2.3. Section 2.3 of the
Existing Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"2.3 Term Loan Facilities. (a) Subject to the
terms and conditions hereof, the Lender agrees to make a term loan to
the Borrower in one advance (such advance, together with any advances
made in connection with the substitution of Term Loan A Aircraft or a
Term Loan A Aircraft Engine pursuant to Section 2.5(a) hereof, "Term
Loan A") on the Closing Date in the principal amount of the lesser of
(a) the Term Loan A Facility on such date and (b) the Term Loan A
Borrowing Base on such date plus the Revolver Reserve on such date
(without regard to the Term Loan B Facility or the Term Loan B
Borrowing Base). Term Loan A shall be dated the Closing Date, stated
to mature in the installments and amounts payable on the dates set
forth in Schedule 2.3A hereto, and bear interest for the period from
the Closing Date on the unpaid principal amount thereof at the
applicable interest rates per annum specified in Section 3.1. All
payments of principal thereof shall reduce the Term Loan A Facility on
a dollar-for-dollar basis.
(b) Subject to the terms and conditions hereof,
the Lender agrees to make a term loan to the Borrower in one advance
(such advance, together with any advances made in connection with the
substitution of Term Loan B Aircraft or Term Loan B Aircraft Engines
pursuant to Section 2.5(b) hereof, "Term Loan B") on the First
Amendment Effective Date in the principal amount of the lesser of (a)
the Term Loan B Facility on such date and (b) the Term Loan B
Borrowing Base on such date. Term Loan B shall be dated the First
Amendment Effective Date, stated to mature in the installments and
amounts payable on the dates set forth in Schedule 2.3B hereto, and
bear interest for the period from the First Amendment Effective Date
on the unpaid principal amount
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thereof at the applicable interest rates per annum specified in
Section 3.1. Notwithstanding the foregoing, no payment of principal
of Term Loan B scheduled to be made during the period commencing with
and including month 25 and ending with and including month 35, in each
case as set forth on Schedule 2.3B shall be required if at the time
such payment is scheduled to be made the Forced Liquidation Value of
the Term Loan B Aircraft and the Term Loan B Aircraft Engines equals
or exceeds 125% of the outstanding principal balance of Term Loan B.
All payments of principal thereof shall reduce the Term Loan B
Facility on a dollar-for-dollar basis."
3. Amendments to Section 2.4. Section 2.4 of the Existing
Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"2.4 Procedure for Term Loan Borrowing. The
Borrower shall give the Lender irrevocable notice, which notice must
be received by the Lender prior to 12:00 noon, New York City time, on
the requested Borrowing Date for each Term Loan, other than any
advance requested to be made in connection with the substitution of
Approved Aircraft pursuant to Section 2.5 (each such advance, a
"Substitution Advance"), and at least ten (10) Business Days prior to
the requested Borrowing Date for any Substitution Advance, in each
case requesting that the Lender make such advance on the requested
Borrowing Date. The amount of each such advance (including any
Substitution Advance) shall be made available to the Borrower by wire
transfer of immediately available funds to the Borrower's account at
First Union National Bank, Jacksonville, Florida, Account No.
2090000628791, ABA No. 000-000-000."
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4. Amendments to Section 2.5. Section 2.5 of the Existing
Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"2.5 Discretionary Term Loan Advance Upon
Substitution of Approved Aircraft. (a) At the request of the Borrower
and after substitution of a Term Loan A Aircraft or a Term Loan A
Aircraft Engine (the "Substitute Term Loan A Aircraft or Engine") for
a Term Loan A Aircraft or a Term Loan A Aircraft Engine which has been
sold or has suffered an Event of Loss within six months after
repayment of Term Loan A to the extent and as required by Section
3.3(d) hereof, the Lender may make an advance in an amount equal to
the lesser of (i) 80% (or such other percentage as the Lender shall
determine in its sole discretion) of the Forced Liquidation Value of
the Substitute Term Loan A Aircraft or Engine, less any applicable
Collateral Reserve, and (ii) the amount, if any, by which (A)
$3,000,000.00 minus all repayments of principal made, or required to
have been made on or prior to the date of such advance in accordance
with Schedule 2.3A hereto exceeds (B) the outstanding principal
balance of Term Loan A on such date (prior to the making of such
advance). Each such advance, if any, shall be made in the sole and
absolute discretion of the Lender and shall be deemed to comprise part
of Term Loan A for all purposes hereunder and shall increase the Term
Loan A Facility on a dollar-for-dollar basis. From and after the
making of such advance the outstanding principal balance of Term Loan
A shall include the amount of such advance, interest shall be payable
on such amount, and the amount of each remaining scheduled principal
repayment shall be increased by an amount equal to (x) the amount of
such advance times (y) a fraction the numerator of which is an amount
equal to such scheduled principal repayment and the denominator of
which is the aggregate amount of all remaining scheduled principal
repayments.
(b) At the request of the Borrower and after
substitution of a Term Loan B Aircraft or a Term Loan B Aircraft
Engine (the "Substitute Term Loan B Aircraft or Engine") for a Term
Loan B Aircraft or a Term Loan B Aircraft Engine which has been sold
or has suffered an Event of Loss within six months after repayment of
Term Loan B to the extent and as required by Section 3.3(d) hereof,
the Lender may make an advance in an amount equal to the lesser of (i)
80% (or such other percentage as the Lender shall determine in its
sole discretion) of the Forced Liquidation Value of the Substitute
Term Loan B Aircraft or Engine, less any applicable Collateral
Reserve, and (ii) the amount, if any, by which (A) $3,750,000.00 minus
all repayments of principal made, or required to have been made on or
prior to the date of such advance in accordance with Schedule 2.3B
hereto exceeds (B) the outstanding principal balance of Term Loan B on
such date (prior to the making of such advance). Each such advance,
if any, shall be made in the sole and absolute discretion of the
Lender and shall be deemed to comprise part of Term Loan B
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for all purposes hereunder and shall increase the Term Loan B Facility
on a dollar-for-dollar basis. From and after the making of such
advance the outstanding principal balance of Term Loan B shall include
the amount of such advance, interest shall be payable on such amount,
and the amount of each remaining scheduled principal repayment shall
be increased by an amount equal to (x) the amount of such advance
times (y) a fraction the numerator of which is an amount equal to such
scheduled principal repayment and the denominator of which is the
aggregate amount of all remaining scheduled principal repayments."
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5. Amendments to Section 3.2(b). Section 3.2(b) of the
Existing Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"(b) The Borrower may at any time and from time to
time prepay either or both of the Term Loans, in whole or in part,
without premium or penalty after giving to the Lender notice, which
must be received by the Lender no later than 12:00 noon, New York City
time on the date of such prepayment and which must specify the date
and amount of prepayment and identify the Term Loan as to which such
prepayment relates. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein
with respect to the Term Loan specified therein and the amount of such
payments shall be applied against scheduled repayments of principal
thereof on a pro rata basis and shall reduce the related Term Loan
Facility on a dollar-for-dollar basis."
6. Amendments to Section 3.3. Paragraphs (b), (c) and (d)
of Section 3.3 of the Existing Credit Agreement are hereby deleted in their
entirety and replaced by the following:
"(b) (i) If on any date on which a Borrowing Base
Certificate is required to be delivered pursuant to Section 6.2(c),
the aggregate outstanding principal amount of the Term Loans exceeds
an amount equal to the sum of the Term Loan Borrowing Bases and the
Revolver Reserve, the Borrower shall immediately prepay the Term Loans
in an aggregate amount equal to the amount of such excess. The amount
of such payment shall reduce the Term Loan Facilities on a
dollar-for-dollar basis and shall be applied (A) first against
the repayment of Term Loan A to the extent that the outstanding
principal amount of Term Loan A exceeds the Term Loan A Borrowing
Base, and then against the repayment of Term Loan B, and (B) in
each such case, against scheduled repayments of principal on a pro
rata basis.
(ii) Without in any way limiting the provisions of
clause (i) of this Section 3.3(b), if at any time during the period
commencing with and including month 25 and ending with and including
month 35, in each case as set forth on Schedule 2.3B hereto, the
outstanding principal amount of Term Loan B exceeds the sum of (i) the
Term Loan B Borrowing Base and (ii) the excess if any of the Term Loan
A Borrowing Base over the outstanding principal amount of Term Loan A,
the Borrower shall immediately prepay Term Loan B in an amount equal
to such deficiency.
(c) Notwithstanding the provisions of paragraphs
(a) and (b) of this Section and subject to Section 3.1(b), the Lender
may, in its sole and absolute discretion and without waiver of any
right hereunder, permit the amount of the Revolver Advances to exceed
the Revolver Borrowing Base for such time and upon such terms and
conditions as it may determine.
(d) The Borrower shall (A) immediately upon each
sale of an Approved Aircraft either substitute, with the consent of
the Lender (in its sole and absolute discretion), Approved Aircraft
having an aggregate Forced Liquidation Value at least equal
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to the Forced Liquidation Value of such sold Approved Aircraft or
prepay the related Term Loan in an amount equal to the lesser of (x)
100% of the Net Proceeds thereof and (y) the sum of the Revolver
Reserve and the amount by which the related Term Loan Borrowing Base
is reduced by such sale, and (B) within two (2) Business Days after
the occurrence of any Event of Loss with respect to an Approved
Aircraft prepay the related Term Loan in an amount equal to the lesser
of (x) the greater of 100% of the Forced Liquidation Value of such
Approved Aircraft immediately prior to such Event of Loss and the
insurance proceeds received or to be received in respect thereof and
(y) the sum of the Revolver Reserve and the amount by which the
related Term Loan Borrowing Base is reduced by such Event of Loss.
Amounts so paid shall be applied to the scheduled repayments of
principal on a pro rata basis and shall reduce the applicable Term
Loan Facility on a dollar-for-dollar basis."
7. Amendments to Section 3.5(e). The THIRD and FOURTH
enumerated paragraphs of Section 3.5(e) of the Existing Credit Agreement are
hereby deleted in their entirety and replaced by the following:
"THIRD, to the payment in full of the outstanding
principal of the Revolver Advances and, upon the occurrence and during
the continuance of an Event of Default, at the option of the Lender,
to the payment in full of the outstanding principal of either or both
of the Term Loans;
FOURTH, to the payment in full of all other
Obligations then due and payable (including, without limitation, any
installment of principal of either or both of the Term Loans then due
and payable); and"
8. Amendments to Section 3.5(f). Clauses (ii) and (iii)
of Section 3.5(f) of the Existing Credit Agreement are hereby amended by
deleting the term "Term Loan Borrowing Base" wherever it occurs therein and
replacing it with the term "Term Loan Borrowing Bases" in each such case.
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9. Amendments to Section 3.5(g). Section 3.5(g) of the
Existing Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"(g) The Borrower agrees that, upon the request by
the Lender, the Borrower will execute and deliver to the Lender (i) a
promissory note of the Borrower evidencing Term Loan A of the Lender,
in form and substance acceptable to the Lender ("Term Note A"), (ii) a
promissory note of the Borrower evidencing Term Loan B of the Lender,
in form and substance acceptable to the Lender ("Term Note B"), and/or
(iii) a promissory note of the Borrower evidencing the Revolver
Advances of the Lender in form and substance acceptable to the Lender
(a "Revolver Note")."
10. Amendments to Section 3.9(a). Section 3.9(a) of the
Existing Credit Agreement is hereby amended by deleting in the last line thereof
the words "the Term Loan" and replacing them with the words "Term Loan A".
11. Amendments to Section 5.1(e). Section 5.1(e) to the
Existing Credit Agreement is hereby amended by deleting in the second line
thereof the words "the Term Loan" and replacing them with the words "Term Loan
A".
12. Amendments to Section 6.2(c). Section 6.2(c) is hereby
deleted in its entirety and replaced by the following:
"(c) prior to 2:00 p.m., New York City time on
each Business Day, a Borrowing Base Certificate showing the Revolver
Borrowing Base, the Term Loan A Borrowing Base and the Term Loan B
Borrowing Base (but only, (i) in the case of the Term Loan A Borrowing
Base, in connection with the delivery of the first such certificate
hereunder and in each case that the Term Loan A Borrowing Base changes
from the amount thereof most recently reported and (ii) in the case of
the Term Loan B Borrowing Base, in connection with the delivery of
such certificate on the First Amendment Effective Date and in each
case that the Term Loan B Borrowing Base changes from the amount
thereof most recently reported), in each case as of the immediately
preceding Business Day, certified as complete and correct by a
Responsible Officer or any vice president on behalf of the Borrower,
which Borrowing Base Certificate shall disclose daily updates of the
amount of Eligible Accounts and Eligible Lease Payment Receivables,
weekly updates of the amount of Eligible Inventory and the Forced
Liquidation Value of Approved Aircraft when required;"
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13. Amendments to Section 9.2. Section 9.2 of the Existing
Credit Agreement is hereby amended by deleting the Borrower's address for
notices in its entirety and replacing it with the following:
"International Airline Support Group, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial
Officer
Fax: (000) 000-0000"
14. Amendments to Schedule I. Schedule I to the Existing Credit
Agreement is hereby amended in its entirety to read as is set forth on Schedule
I hereto.
15. Amendments to Schedule 1.1. Schedule 1.1 to the Existing
Credit Agreement is hereby amended in its entirety to read as is set forth on
Schedule 1.1 hereto.
16. Amendments to Schedule 2.3. Schedule 2.3 to the Existing
Credit Agreement is hereby deleted in its entirety and replaced with Schedule
2.3A, which shall read as is set forth on Schedule 2.3A hereto, and Schedule
2.3B, which shall read as is set forth on Schedule 2.3B hereto.
17. Amendments to Schedule 4.19. Schedule 4.19 to the Existing
Credit Agreement is hereby amended in its entirety to read as is set forth on
Schedule 4.19 hereto.
ARTICLE IV
Waiver
1. Waiver. The Lender hereby waives any Default or Event
of Default arising as a result of the failure by the Borrower to comply with or
to satisfy the requirements of Section 7.18 of the Existing Credit Agreement,
but only with respect to the Aircraft Acquisition.
ARTICLE V
Conditions to Effectiveness
This Amendment, and the modifications to the Credit Agreement
provided for herein, shall become
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effective on the date (the "First Amendment Effective Date") on which all of the
following conditions have been (or are concurrently being) satisfied:
1. The following documents shall have been executed and
delivered by each party thereto:
(i) this Amendment;
(ii) Amendment No. 1 to Borrower Security Agreement;
(iii) the Term Loan B Aircraft Chattel Mortgages;
(iv) the Xxxxx Aircraft Lease Supplements;
(v) the Xxxxx Consent and Agreement;
(vi) the Term B Note;
(vii) the Pledge Agreement; and
(viii) all Uniform Commercial Code financing statements on Form
UCC-1 and UCC-3 required by the Lender.
2. The Lender shall have received executed legal opinions
of King & Spalding, special counsel to the Borrower, in form and substance
satisfactory to the Lender and taking into account this Amendment and the
matters contemplated hereby (including, without limitation, opinions with
respect to the validity of the First Amendment Documents and the effectiveness
of UCC filings in each state where Collateral described therein is located).
Such legal opinion shall cover such matters incident to the transactions
contemplated by this Amendment and the other First Amendment Documents as the
Lender may reasonably require.
3. The Lender shall have received the executed legal
opinion of Xxxxxxxxx, Xxxxxx & Xxxxxxxx, special FAA counsel to the Borrower, in
form and substance satisfactory to the Lender taking into account this Amendment
and the matters contemplated hereby (including, without limitation, opinions as
to the effectiveness of the filing of the Term Loan B Aircraft Chattel Mortgages
and the Xxxxx Aircraft Lease Supplements with the FAA). Such legal opinion
shall cover such matters incident to the transactions contemplated by this
Amendment and the other First Amendment Documents as the Lender may reasonably
require.
4. The Lender shall have received a copy, in form and
substance reasonably satisfactory to the Lender, of the
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corporate resolutions of the Borrower, authorizing the Aircraft Acquisition and
the execution, delivery and performance of this Amendment and the other First
Amendment Documents to which the Borrower is a party, certified by the Secretary
or an Assistant Secretary of the Borrower as of the First Amendment Effective
Date, which certificates shall state that the resolutions or authorizations
thereby certified have not been amended, modified, revoked or rescinded as of
the date of such certificate.
5. The Lender shall have received a certificate of the
Secretary or an Assistant Secretary of the Borrower, dated the First Amendment
Effective Date, as to the incumbency and signature of the officer(s) of the
Borrower executing each First Amendment Document to which it is a party and any
certificate or other document to be delivered by it pursuant hereto, together
with evidence of the incumbency of such Secretary or Assistant Secretary.
6. The Lender shall have received certificates from the
Borrower, stating that its Governing Documents have not been amended since
September 30, 1996.
7. The Lender shall have received copies of certificates
dated as of a recent date from the Secretary of State or other appropriate
authority of such jurisdiction, evidencing the good standing of the Borrower in
the State of its organization and in each State where the ownership, lease or
operation of property or the conduct of business requires it to qualify as a
foreign corporation or other entity except where the failure to so qualify would
not have a Material Adverse Effect.
8. The Lender shall have received all chattel paper
original copies of the Xxxxx Leases and all documents required to be delivered
under Article Three of each of the Term Loan B Aircraft Chattel Mortgages.
9. Each of the representations and warranties made by the
Borrower in or pursuant to the Credit Documents shall be true and correct in all
material respects on and as of the First Amendment Effective Date as if made on
and as of such date (except to the extent the same relate to another, earlier
date, in which case they shall be true and correct in all material respects as
of such earlier date).
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10. Except as provided for in Article IV, no Default or Event of
Default shall have occurred and be continuing.
11. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by the First Amendment Documents, the Existing Credit Agreement,
the Credit Agreement and the other Credit Documents shall be reasonably
satisfactory in form and substance to the Lender, and the Lender shall have
received such other documents in respect of any aspect or consequence of the
transactions contemplated hereby or thereby as it shall reasonably request.
12. The Lender shall have received a Borrowing Base Certificate
showing the Revolver Borrowing Base, the Term Loan A Borrowing Base and the Term
Loan B Borrowing Base, in each case as of the Business Day immediately preceding
the First Amendment Effective Date, with appropriate insertions and dated the
First Amendment Effective Date, satisfactory in form and substance to the
Lender, executed by a Responsible Officer or any Vice President of the Borrower.
13. The Lender shall have received evidence in form and
substance satisfactory to it that all of the requirements of Section 6.6 of the
Existing Credit Agreement and Section 5(o) of the Borrower Security Agreement
shall have been satisfied with respect to the Term Loan B Aircraft.
14. The Lender shall have received evidence in form and
substance satisfactory to it that all filings, recordings, registrations and
other actions, including, without limitation, the filing of duly executed
Aircraft Chattel Mortgages with the FAA and financing statements on forms UCC-1,
necessary or, in the opinion of the Lender, desirable to perfect the Liens
created by the Security Documents with respect to the Term Loan B Aircraft shall
have been completed.
15. The Lender shall have received each additional document,
instrument, legal opinion or item of information reasonably requested by the
Lender, including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which the Borrower is be a party.
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ARTICLE VIII.
Miscellaneous
1. Closing Fee; Payment of Expenses. (a) On the First
Amendment Effective Date, the Borrower shall pay to the Lender in immediately
available funds a fee equal to $50,000.00 (which shall be in addition to all
fees paid to the Lender prior to the execution and delivery of this Amendment).
The Lender is hereby authorized to withhold the amount of such fee from the
proceeds of Term Loan B.
(b) Without limiting its obligations under Section 9.5 of
the Existing Agreement, the Borrower agrees to pay or reimburse the Lender for
all of its reasonable costs and expenses incurred in connection with this
Amendment and the other First Amendment Documents, including, without
limitation, the reasonable costs and expenses of Cadwalader, Xxxxxxxxxx & Xxxx,
counsel to the Lender and expressly acknowledge that their obligations hereunder
constitute "Obligations" within the meaning of the Existing Credit Agreement.
2. No Other Amendments; Confirmation. Except as expressly
amended, modified and supplemented hereby and by the documents related hereto,
the provisions of the Existing Credit Agreement and the other Credit Documents
shall remain in full force and effect.
3. Acknowledgment. The Borrower hereby acknowledges that
the Xxxxx Consent and Agreement constitutes a Consent and Agreement under the
Agreement and each of the Term Loan B Aircraft Chattel Mortgages constitutes an
Aircraft Chattel Mortgage under the Agreement.
4. Affirmation by Borrower. The Borrower hereby consents
to the execution and delivery of this Amendment and each of the other First
Amendment Documents to which Borrower is a party and reaffirms its obligations
under the Credit Documents.
5. Governing Law; Counterparts. (a) This Amendment and
the rights and obligations of the parties hereto shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.
(b) This Amendment may be executed by one or more of the
parties hereto
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on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of
the counterparts of this Amendment signed by all the parties shall be lodged
with the Borrower and the Lender. This Amendment may be delivered by facsimile
transmission of the relevant signature pages hereof.
[SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day and year first above
written.
INTERNATIONAL AIRLINE SUPPORT
GROUP, INC.
By
______________________________
Name:
Title:
BNY FINANCIAL CORPORATION
By
______________________________
Name:
Title:
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